Looking Down The Barrel Of A Gun!                                      03 November 2023

The 1,655 real estate and properties transactions totalled US$ 3.19 billion, during the week ending 03 November 2023. The sum of transactions was 277 plots, sold for US$ 1.40 billion, and 1,378 apartments and villas, selling for US$ 981 million. The top three transactions were all for plots of land, the first two in Madinat Dubai Almelaheyah, sold for US$ 138 million and for US$ 95 million, and the third in Burj Khalifa for US$ 49 million. Palm Jumeirah recorded the most transactions, with ninety-two sales, worth US$ 586 million, followed by forty-six sales, in Madinat Hind 4, for US$ 22 million, and thirty-one sales in Zaabeel First valued at US$ 45 million. The top three transfers for apartments and villas were all for apartments, the first in Palm Jumeirah, sold for US$ 31 million, and two apartments in Zaabeel First for US$ 29 million and US$ 28 million. The mortgaged properties for the week reached US$ 638 million, with the highest being for land in Business Bay for US$ 102 million; one hundred and twenty-eight properties were granted between first-degree relatives worth US$ 170 million.

Abu Dhabi’s biggest developer has successfully launched onto the Dubai property sector and phase 1 of Haven by Aldar, comprising 468 units, was sold out. It has subsequently launched phase 2 and has already sold 786 villas, generating US$ 845 million in sales. The final phase of Haven, which includes further villas, townhouses, and apartments, will launch for sale in Q1 2024. Handover will commence in Q3 2027. Aldar Properties posted that UAE nationals accounted for 23% of all sales, with expat residents and overseas buyers accounting for the balance; 499% of buyers were over the age of forty-five. The Abu Dhabi interloper has agreed a JV with Dubai Holding to build three new residential communities to be developed in the emirate.

For the first nine months of the year, DLD posted that there had been significant 33.8% and 36.7% hikes in both transactions and values at 116.1k and US$ 117.08 billion compared to the same period in 2022. Some of the factors involved in these results include the emirate’s rising global profile, exceptional infrastructure and progressive government initiatives. There was also a 50.3% growth in value and a 33.3% upward movement in the number of investments to US$ 75.94 billion and 81.7k.

In the period, Al Barsha South Fourth was number one in the list of top locations based on transactions with 10.4k, followed by Dubai Marina (9.1k), Business Bay (7.4k), Wadi Al Safa 5 (5.6k), Al Mirkadh (5.5k), Al Thanyah 5 (5.4k), Burj Khalifa (5.2k), Al Khiran First (4.6k), Hadaeq Mohammed bin Rashid (4.2k), and Jebel Ali First (3.7k).

The top ten areas in terms of transactional value were Dubai Marina, (US$ 10.0 billion), Palm Jumeirah (US$ 7.77 billion), Jebel Ali Industrial First (US$ 7.61 billion), Wadi Al Safa 3 (US$ 6.90 billion), Business Bay (US$ 5.47 billion), Burj Khalifa (US$ 4.87 billion), El Merkadh (US$ 3.96 billion), Al Khairan First (US$ 3.76 billion), Hadaeq Mohammed bin Rashid (US$ 3.71 billion), and Jebel Ali First (US$ 3.52 billion).

When it comes to mortgages the top ten were Dubai Marina (1,186), Al Thanyah Fifth (879), Al Barsha South Fourth (879), Burj Khalifa (874), Jebel Ali First (789), Al Awir First (743), Hadaeq Mohammed bin Rashid (665), Business Bay (652), Wadi Al Safa 5 (629), and Palm Jumeirah (526).Value-wise, the top locations, in terms of the value of the mortgages, were Jebel Ali First (US$ 7.57 billion), Wadi Al Safa 3 (US$ 4.08 billion), Jebel Ali First (US$ 1.90 billion), Palm Jumeirah (US$ 1.90 billion), Dubai Marina (US$ 1.37 billion), Business Bay (US$ 1.12 billion), El Merkadh (US$ 940 million), Al Khairan (US$ 828 million), Al Barsha South Fourth (US$ 657 million) and Burj Khalifa.

Valustrat’s Q3 report noted that Dubai’s residential rents climbed 27.2%, on the year, and 2.1% on the month, with villa rentals 38.7% higher on the year. Villa rentals rose 38.7% annually but witnessed an insignificant change when compared to the previous quarter. Average annual rents for three-bedroom villas stood at US$ 85k, 4 B/R at US$ 104k, and 5 B/R villas at US$ 134k. Apartment rentals grew at the slower pace of 19.1% on the year and 3.6% on the quarter, with average rentals for studio, 1, 2 and 3 B/R apartments at US$ 14k, US$ 20k, US$ 30k and US$ 46k. It estimated that Q3 residential occupancy stood at 88.9%.

These figures were in contrast with CBRE which posted that, in the past twelve months, average Dubai residential prices were 19.6% higher, with average apartment and villa prices up by 19.7% and 18.9%. Along with a slowdown in selling prices, rentals also weakened with September posting a 20.6% return, down 1.1% on the month; (this is in line with an Allsopp & Allsopp report posting those rents had declined to 21.0% in Q3). The consultancy noted that in the first nine months of 2023, 27.1k units were delivered and that a further 34.7k were expected to be handed over by the end of the year. It was reported that Meydan One, Downtown Dubai and Business Bay accounted for 46.4% of all units already handed over this year. The Dubai Land Department posted that, in Q3, real estate transactions had grown 22.0% to 31.2k with a staggering 40.0% rise in value to US$ 26.58 billion.

ValuStrat also noted that Dubai office space grew 25.5%, with its VPI 7.3% higher on the quarter to 103 points, compared with a 100-point base in Q1 2015. The weighted average price for an office in Dubai was US$ 3,877 per sq mt, with double-digit annual growth in five major central business districts in Dubai – Jumeirah Lake Towers (37.2%), DIFC (33.7%), Business Bay (22.2%), Downtown Dubai (16.8%), and Barsha Heights (14.8%). The report also noted that valuations for shell and core Grade A office space grew 33.3% on the year, while the same classified Grade B growing 19.2%. Q3 returns saw office transitions, at 631, 9.0% higher on the year but 4.7% lower, on the quarter, with the median transacted price at US$ 3,035 per sq mt, up 28.4% annually and 9.1% on a quarterly basis.

According to proptech platform, Realiste AI, the five Dubai locations likely to show the highest price appreciation in Q4 are Bukadra Part 2, Sobha Hartland, Al Warsan First, Dubai Harbour and Al Kheeran with quarterly increases of 8.12%, 8.05%, 6.99%, 6.18% and 5.88%. The platform sees Bukadra Part 2 prices for a 1 B/R apartment rising to US$ 6,628 per sq mt.

Last week saw the start of Dubai’s new cruise season, as the liner Mein Schiff 2 was the emirate’s first arrival, with over one hundred and fifty cruise ships expected to call in Dubai at Mina Rashid and Dubai Harbour, over the next five months. Dubai will also host the Resilient Lady Ship, operated by Virgin Voyages, for the first time, with the vessel set to embark on two routes from the city this season. Last year, Dubai Harbour Cruise Terminal welcomed 300k passengers, and numbers are expected to jump 28% this season. Dubai is a member of the Cruise Arabia alliance, comprising three other key ports in the region, including Abu Dhabi, Bahrain and Oman, with the aim to promote the region as a cruise ship destination globally. Major cruise companies MSC Cruises, TUI Cruises, Aida Cruises, Costa Cruises and Ponant Cruises will operate cruises from Dubai, while cruise lines such as Cunard, P&O Cruises, Princess Cruises, Royal Caribbean Cruise Lines, Celebrity Cruises, Norwegian Cruises, Silversea Cruises, and Cordelia Cruises will also operate routes via the emirate. Dubai Harbour Cruise Terminal has twin terminals on a 910 mt pier and is capable of processing more than 3.2k passengers an hour. Mina Rashid can handle seven mega-cruise vessels or 25k passengers at once. The port’s Hamdan bin Mohammed Cruise Terminal, the world’s largest single covered cruise terminal facility, is capable of handling 14k passengers a day.

The eighteenth edition of the Dubai Air show is fast approaching – 13-17 November – which is expected to bring in a record number of 1.4k exhibitors, (including four hundred first timers and eighty plus start-ups), other global players and visitors. Despite the name, the event also represents the space and defence sectors. The regional airlines are fast recovering from the pandemic, with recent global figures standing at 96% of pre-Covid levels, whilst ME airlines posted a 27.3% increase in August traffic compared to a year earlier. Furthermore, Dubai Airports also posted a 49.0% increase in H1 passenger traffic at 41.6 million guests, with a 43% surge in Q1 passenger traffic.

On Wednesday, the Dubai Integrated Economic Zones Authority announced the launch of a venture capital fund worth US$ 136 million. Launched under the patronage of HH Sheikh Mohammed bin Rashid, and in the presence of his son, Sheikh Ahmed bin Mohammed, Second Deputy Ruler of Dubai, the fund is designed to finance technology start-ups and to support the economic objectives outlined in the Dubai Economic Agenda, D33. The fund is the first investment programme launched under the name of Oraseya Capital, the venture capital arm of DIEZ specialising in venture investment operations in start-ups.

Driven by strong non-oil sector growth, the country’s economy expanded by 3.7% in H1, according to the Minister of Economy Abdulla bin Touq, who added that although the figures were not as impressive as seen in H1 2022, it was still “robust growth against the backdrop of global and regional uncertainty”. Accounting for 71% of UAE’s GDP, the non-oil sector posted a “staggering” 5.9% H1 growth; Q1 saw a 4.5% rise to US$ 84.9 billion. The Minister also commented that, “the UAE’s economic growth is a testament to our resilience, diversification and commitment to openness and international co-operation.” He seems to be confident that the upward trend will continue into H1, with the UAE’s GDP estimated to expand by 3.6% for the year. Interestingly, he noted that “the policymakers are not facing a dilemma anymore – the classic trade-off between growth and inflation. What they’re facing is a ‘trilemma’ as they also have to worry about financial stability.” (The Trilemma theory posits that countries have three options for managing international monetary policy, but only one is achievable at a given time). There is no doubt that a range of government initiatives has allowed the UAE economy to spring back quicker than most global economies, all of which have been impacted by inflation, slowing global growth, geopolitical uncertainties, and rising interest rates.

A study by US News & World Reports notes that the UAE rates as the world’s second most stable country economically on the back of entrepreneurship opportunities, easy access to capital, availability of skilled labour force, agility to adapt, competitiveness and strong trade among.  It is only behind Switzerland and ahead of the likes of Canada, Germany, Japan, Sweden, Australia, Netherlands, Norway and Denmark. Apart from being the most competitive economy in the Arab world, its per capita GDP, at US$ 87.7k, is on par with top European countries; its total GDP stands at US$ 508.0 billion, with a 2030 target of US$ 817.4, (AED 3 .0 trillion). The country also has some of the world’s largest sovereign wealth funds such as Abu Dhabi Investment Authority, Mubadala, Investment Corporation of Dubai, Dubai World, ADQ and others, holding trillions of dollars’ worth of assets to provide cushion against economic volatility around the world.

With the US Federal Reserve Board announcing that there would be no change to its 5.40% Base Rate, applicable to the Overnight Deposit Facility, the Central Bank of the UAE has followed suit leaving its Base Rate applicable to the Overnight Deposit Facility, unchanged at the same rate. The local central bank also left the rate, applicable to borrowing short-term liquidity through all standing credit facilities, unchanged at 50bp above the Base Rate.

After rises over the past three months, the UAE Fuel Price Committee decreased all retail fuel prices. Eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic saw prices frozen by the Fuel Price Committee. In March 2021, prices were amended to reflect the movement of the market once again, as November retail prices all head south:

• Super 98: US$ 0.826 – down by 11.9% on the month and up 4.2% YTD from US$ 0.793  
• Special 95: US$ 0.796 – down by 12.3% on the month and up 9.5% YTD from US$ 0.727
• Diesel: US$ 0.932 – down 4.2% on the month and up 4.0% YTD from US$ 0.896
• E-plus 91: US$ 0.777 – down by 12.5% on the month and up 10.1% YTD from US$ 0.706

A novel initiative, Dubai Programme for Gaming 2033, introduced by Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed, aims to enhance Dubai’s global position in the gaming industry world, with plans to make it one of the top ten cities in the sector and to generate 30k jobs over the next decade. By 2033, it is hoped that it will contribute up to US$ 1.0 billion to Dubai’s GDP. To help the process progress, it will offer support to developers, designers and programmers, as well as entrepreneurs and start-ups in creative industries, as well as to “establish an incubating environment for developers”. The country, along with Saudi Arabia, are in the forefront of the ME gaming industry which, according to the Future of Trade 2023 is projected to hit US$ 6.0 billion by 2027, compared to under US$ 3.0 billion in 2021, about double the figure from 2021. Overseen by the Dubai Future Foundation, the emirate’s new gaming programme will focus on three main areas – talent, content and technology. Yesterday, Sheikh Hamdan also approved the launch of another three new initiatives – the Metaverse Alliance, Metaverse Guidelines and Metaverse Pioneers as part of the Dubai Metaverse Strategy, which was launched in July 2022; it was hoping that this would create 40k new jobs and would add US$ 4.0 billion to the DDP by 2026. 

Because it failed to ensure that its systems were able to contain market abuse, FFA Private Bank was fined US$ 374k by the Dubai Financial Services Authority, DIFC’s regulator. The lender, which provides services across private wealth management, online trading and capital markets, was penalised because it had “inadequate systems and controls to identify, assess and report suspicious and potential market abuse between February 2018 and March 2021″.

National Bonds posted a 40k increase in its customer base and recorded significant growth in its investment portfolio by 9.0% to reach US$ 3.81 billion during H1. The country’s savings and investment company, which has seen the entity grow at an annual growth of 12.0%, offers a wide range of savings and investment solutions, that can help support their future financial goals, including building emergency funds and securing their children’s education. It also contributes to individual, corporate, and national growth, by offering diverse and inclusive regular savings solutions catering to both individual and corporate needs, such as “Tejouri Al Emarateyat”, a solution for Emirati Women, “Global Savings Club”, and “Golden Pension Plan” which caters to corporates, and “Second Salary” designed for individuals, all with the goal of fulfilling the retirement aspirations of both UAE Nationals and Expats.

Dubai Islamic Bank posted a H3 profit, almost 20% on the year, at almost US$ 449 million, helped by the growing local economy, with the country’s biggest Sharia-compliant lender reporting a 45.0% hike in revenue to US$ 1.23 billion. Its quarterly income from properties for development and sales more than doubled to US$ 218 million, with commissions, fees and foreign exchange income increasing by 16% to US$ 105 million. Over the first nine months of the year, total income and net profit both rose by 47% to US$ 3.96 billion and 16.0% to US$ 1.28 billion; operating expenses came in 13.0% high at US$ 615 million. By the end of September, the bank’s total customer deposits climbed 11 .0% to US$ 6.02 billion, with assets 8.7% higher at US$ 85.39 billion. In September, DIB confirmed it was acquiring a 20% stake in Turkey’s TOM Group of Companies.

Al Ansari Financial Services PJSC announced that it would pay an interim dividend payment of US$ 82 million equivalent to US$ 0.0109 per share, with a similar pay-out slated for April 2024. The latest cash distribution is in line with the group’s previously announced dividend policy. Rashed Ali Al Ansari, group chief executive officer of Al Ansari Financial Services, commented: “We are pleased to announce the distribution of our first proposed interim dividend payment of Dh300 million, in accordance with the vision of our Board of Directors and the subsequent approval of our shareholders. We believe that this approval reflects our commitment to ensuring consistent returns and long-term value for our shareholders.”

Emirates Central Cooling Systems Corporation PJSC posted its latest financials for Q3 showing an EBITDA of US$ 292 million on total revenue of US$ 619 million. For the first nine months of the year, both EBITDA and revenue posted improved results – by 7.5% and 9.0%. For the twelve months to 30 September, the figures were US$ 395 million and US$ 744 million – both up 9.5%. Last month, Empower paid out a US$ 116 million H1 cash dividend, in line with an IPO pledge that it would pay out US$ 232 million for the first two years of its DFM debut. Empower holds more than 80% of Dubai’s district cooling market, and in Q3, it added over ten new buildings to its portfolio with 70% of these being residential buildings, 20% commercial, and 10% mixed-use buildings.

e& announced its consolidated financial results for Q3 2023 reporting consolidated revenues of US$ 3.65 billion with a 3.3% year on year, increase while consolidated net profit was US$ 817 million. 

Emirates Integrated Telecommunications Company PJSC, the company known as du, posted a 57.7% hike in Q3 profits to US$ 148 million, with revenue nudging 3.7% higher at US$ 897 million; the main contributors were mobile services and fixed services both heading north – by 5.7% to US$ 416 million and by 5.3% to US$ 256 million. Partly due to lower hubbing and handset sales, other revenues dipped 1.5% to US$ 225 million. In Q3, the telecom’s 5G network reached a 98.5% coverage and over the period, it added 85.7k mobile customers, 32.2k post-paid and 53.5k prepaid, and 13.8k fixed customers. Double digit growth was seen in its major profitability KPIs – 13.8% on EBITDA, 65.1% of Operating Cash Flow and 57.7% on Net Profit.

Dubai Financial Market announced that its net profit increased by 109% to US$ 51 million in Q3. There was a notable increase in the number of trades, overall trade value, and an influx of new investors. YTD to September, DFM’s total consolidated revenue increased by 48% to US$ 96 million – US$ 58 million in operating income and US$ 38 million in investment returns and other income. Meanwhile, total expenses jumped 11.3% to US$ 45 million. The total number of trades increased to 1.43 million trades in the first nine months of 2023, representing a notable 37% increase in trading activity over the same period last year. Total trading value rose to US$ 21 billion, recording an increase of 13% over the same period last year. The DFM General Index also rose by 25% during this period, closing at 4,136.58. DFM’s market capitalisation rose to US$ 189.9 billion. In the nine months, there were 35.4k new investors to bring the total number to over one million, with institutional investors accounting for 56% of the trading value, with net purchases of US$ 420 million.

The DFM opened on Monday, 30 October 2023, 591 points lower the previous fortnight, gained 143 points (13.6%) to close the trading week on 3,787, by Friday 03 November 2023. Emaar Properties, US$ 0.47 lower the previous four weeks, gained US$ 0.14 to close on US$ 1.86 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.64, US$ 4.48, US$ 1.42, and US$ 0.35 and closed on US$ 0.65, US$ 4.80, US$ 1.48 and US$ 0.37. On 03 November, trading was at 112 million shares, with a value of US$ 69 million, compared to 158 million shares, with a value of US$ 76 million, on 27 October 2023.

The bourse had opened the year on 3,438 and, having closed on 31 October at 3,877, was 449 points (12.8%) higher. Emaar started the year with a 01 January 2023 opening figure of US$ 1.60, to close the first ten months at US$ 1.82. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.59, US$ 3.54, US$ 1.55 and US$ 0.41 and closed YTD at US$ 0.65, US$ 4.62, US$ 1.47 and US$ 0.36.   On 31 October, trading was at 157 million shares, with a value of US$ 100 million, compared to 66 million shares, with a value of US$ 18 million, on 31 December 2022. 85.15 2,000

By Friday, 03 November 2023, Brent, US$ 2.17 lower (2.4%) the previous week, shed US$ 4.91 (5.5%) to close on US$ 85.15. Gold, US$ 139 (6.2%) higher the previous fortnight, shed US$ 16 (0.8%) to US$ 2,000 by 03 November 2023.

Brent started the year on US$ 85.91 and shed US$ 0.55 (0.6%), to close 31 October 2023 on US$ 85.36. Meanwhile, the yellow metal opened 2023 trading at US$ 1,830 and gained US$ 157 (7.9%) to close YTD on US$ 1,987. 

Oil prices, which breached the $95 mark in September, have since pared some gains amid concerns over the global economy and rising crude supply from countries such as Iran and Venezuela. Despite the US sanctions, initiated in 2018, Iran has managed to push its daily production levels to 3.4 million bpd, and according to the country’s oil minister, Javad Owji, this could rise even further with higher investment in onshore and offshore oilfields. Opec, of which Iran is a member, noted that oil production rose 21.6% on the year to 3.1 million bpd by September 2023. But with its possible involvement in Hamas’s October attack on Israel, there is every chance that the Biden administration may enforce stronger sanctions on Tehran’s crude exports. If that were to happen and Iran’s crude exports are cut by say 600k bpd, the impact on an already undersupplied market will inevitably push prices well into the triple digit arena. If the unthinkable happened – and there is a blockade of the Gulf – then oil prices will escalate to unknown highs and the negative effect on the global economy would be immense.

In Q3, Maersk’s pre-tax profits fell to US$ 691 million, compared to US$ 9.1 billion on the year, as sales tanked 46.7% to US$ 12.1 billion. Because of lower freight rates and dipping demand, AP Moiler-Maersk is planning to cut 3.5k jobs with this coming after 6.5k were retrenched earlier in the year; this will result in the payroll dipping to below 100k. It expects the exercise will save US$ 745 million. The shipping company had seen recent quarterly profits down by 92% and commented that “worsening” prices for shipping by sea required further job cuts. AP Moiler-Maersk, one of the world’s biggest shipping firms, transports goods for major retailers such as Nike. The Danish company’s chief executive noted that “since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling.” Many consider Maersk a bellwether for the global economy – if going well, there will always be strong demand, but the opposite applies when the economy is heading in the other direction.

Helped by rising energy prices, Shell posted impressive Q3 figures but they were lower on the quarter; reported earnings came in on US$ 6.2 billion, compared to US$ 9.4 billion a year earlier, but 23.0% higher on the quarter. The energy company also announced that it would return US$ 3.5 billion to shareholders through a share buyback programme, bringing the total payback for the year to US$ 23.0 billion. To some critics, it seems that Shell seem to be ploughing money into dividends, share buybacks, and new fossil fuel projects, and not enough to its employees, (with new plans to slash its employee numbers by 15%), and new fossil fuel projects.

Meanwhile BP reported lower than expected profits despite global oil prices on the move higher, with the US$ 3.3 billion Q3 profit well short of analyst’ expectations of some US$ 4.0 billion – and much lower than the US$ 8.1 billion return over the same period in 2022; however, it was US$ 0.7 billion higher on the quarter. The energy giant noted that although oil production was strong, gas trading had been weak in recent months. It did warn that the recent higher oil refining margins, seen recently across the oil and gas industry, would be “significantly lower” towards the end of 2023. The profit was also impacted by BP taking a US$ 540 million charge on three wind farm projects off the coast of New York. The UK’s government windfall tax policy has cost a further US$ 620 million, in the first nine months of 2023, bringing its total tax bill to US$ 1.35 billion, compared to US$ 700 million and US$ 2.2 billion.

In Q3, HSBC posted an impressive 93% hike in non-interest income to US$ 6.90 billion, mainly due to the non-recurrence of the impairment relating to the sale of its retail banking operations in France. Operating expenses climbed 2.0% on the year to US$ 800 million, attributable mainly to higher technology costs, the impact of rising inflation and an increase in performance-related pay accrual. Impairment charges included a US$ 500 million charge relating to the commercial property sector in mainland China. During the period, it attracted an additional US$ 34.0 billion of net new invested assets – a 12.0% increase on the year. Customer lending was flat at US$ 936 million, with customer deposits also largely unchanged at US$ 1.56 billion. With its third US$ 0.10 dividend, it has brought the total for the year to US$ 0.30 per share, as well as three share backs totalling US$ 7.0 billion.

The UK’s second biggest supermarket chain has claimed that some of its customers are returning to shop at Sainsbury’s after ditching the chain to shop with its cheaper rivals, Aldi and Lidl. It posted that grocery sales were up 10% in the six months to mid-September; (some of that increase must have emanated from inflation which pushed grocery prices as high as 15% during the year). However, Sainsbury’s profit before tax declined 27% to US$ 335 million, not helped by demand for clothing sales being hit by a cooler summer and a warm early autumn. Sainsbury’s said it had not gained more of an overall share of the market, but it did claim that it was the only big supermarket to be winning back customers and gaining spend from Aldi and Lidl. Whether its strategy to run an “Aldi price match” campaign has worked remains to be seen but full marks to the German rival retorting with “Shoppers know that the only place to get Aldi prices is at Aldi”. The Office for National Statistics posted that October food price inflation remained high at 12.2% on an annual basis but had been easing.

Apple has introduced two new computers, MacBook Pro and iMac, and the M3, M3 Pro and M3 Max chips to power them. At the launch event, for professional users, it demonstrated its new secure screen sharing feature that would let professional users work on their machines from remote locations. The tech giant noted that the M3 Max chip was aimed at AI developers, who need huge amounts of memory to develop chatbots and other models, and that the new chips would be the first for laptops and desktops that use three nanometre manufacturing technology, which will give the chips better performance for each watt of electricity used. The chipmaker remains unknown, but it probably is the Taiwan Semiconductor Manufacturing which uses the same technology to make chips for the top-end iPhone 15 models.

With winter approaching, it does seem that not only the weather but also the UK housing market is beginning to cool, as signalled by a further decline (4.6%) in September mortgage approvals to 43.3k – its lowest level in nine months. September net approvals for re-mortgaging fell 18.0% to 20.6k – its lowest level since January 1999. In September, the “effective” interest rate, the actual interest paid to lenders, on newly drawn mortgages rose by 1.9% to 5.01%. In the twenty-one months from December 2021 to August 2023, the Monetary Policy Committee has been responsible for rates to climb from just 0.1% to 5.25%; since then, they have not moved, with another month of no movement following yesterday’s BoE decision. It does seem that months of higher mortgage rates have finally had the desired effect, and if that is indeed the case, then the era of rising rates has ended – but the current high rates will remain in situ well into 2024.

Yesterday, the BoE  left rates on hold for the second time in a row at 5.25%, the highest level in fifteen years. Its governor, Andrew Bailey, warned that the economy was likely to see zero growth until 2025, while interest rates will remain high for longer or rise further; on the flip side, he did expect that inflation would fall sharply in the coming months. (Note the man has been wrong before). Latest  figures posted inflation at 6.7% in September, with expectations that it would dip to around 3.0% by mid 2024 before achieving its 2.0% target in 2025.

A sign that the US economy is slowing is that employers added just 150k jobs in October, attributable to the weight of strikes and high interest rates; the unemployment rate rose 0.1% to 3.9%, and it seems that the long streak of stronger-than-expected job gains may be over. Despite soaring interest rates, the main aims of which were to cool the economy and stabilise prices, the dilemma is that the job market continued to remain far more robust than expected with an average 250k monthly addition – with average hourly earnings 4.1% higher during the same period. One result of the October figure was that that it reduced the possibility of any further Fed rate hike this year.

With reports circulating that WeWork could file for bankruptcy within days, its shares tanked by over 50% on Wednesday. The troubled office-sharing firm was once seen as the answer to the future of the office but was impacted badly by the pandemic, as more people started working from home; earlier, it did itself no favour by self-inflicted problems including a disastrous 2019 attempt to sell shares to the public due to concerns about its debts, losses and management, and the ungainly exit of its co-founder. It has agreed with creditors to temporarily postpone payments for some of its debt. What was once a great ground shaking idea probably grew too quickly and was badly managed, taking on too much debt and opening too many sites at once. Lately, it has been a victim of rising interest rates, pushing up already bloated costs.  The firm, once valued at US$ 47 billion in early 2019, has now lost 98% of its stock market valuation over the past twelve months and is now Looking Down The Barrel Of  A Gun!